Scammers, Spammers, and Slammers

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Another crook bites the dust:

SEC target Vukovich settles broker bribery case

2011-12-28 15:35 ET - Street Wire

by Mike Caswell

The U.S. Securities and Exchange Commission has reached a $262,171 settlement with Vancouver's Bozidar "Bob" Vukovich for his role in a broker bribery scheme. (All figures are in U.S. dollars.) The SEC claimed that he paid kickbacks to have brokers buy $2-million worth of shares in an OTC Bulletin Board listing, Pantera Petroleum Inc.

The settlement is contained in a consent judgment filed on Dec. 9, 2011, in New York. Mr. Vukovich's fine includes a $130,000 civil penalty and disgorgement of $113,575 in ill-gotten gains, plus interest. He also agreed that the judge will determine whether a penny stock ban is appropriate and set the length of such a ban. In settling the case, Mr. Vukovich did not admit to any wrongdoing.

The deal with Mr. Vukovich comes six months after his co-defendant, former Pantera president Christopher Metcalf, also settled. He agreed to serve a ban and to pay fines that the judge will determine. He too did not admit to any wrongdoing.

SEC's complaint

The charges the men faced stemmed from a scheme to have brokers buy shares of Pantera in return for a 30-per-cent kickback, the details of which are contained in a brief civil complaint the SEC filed on Jan. 24, 2011, in the Southern District of New York. According to the complaint, the scheme began in March, 2008, when Mr. Metcalf met a man who said he could arrange for brokers to buy up to $2-million worth of Pantera shares using discretionary accounts. (The SEC only identified the man as "Individual A." In other similar cases Individual A turned out to be an undercover FBI agent.)

Mr. Metcalf agreed to the arrangement during a March 3, 2008, phone call, the SEC claimed. He said that "for obvious reasons" he could not personally execute the trades, and asked Individual A to co-ordinate the trading with Mr. Vukovich.

According to the complaint, Mr. Vukovich then arranged an initial test transaction with Individual A. The brokers would buy 200,000 shares and Mr. Vukovich would send the kickback to an account designated by Individual A. The SEC said the buying took place as planned over a one-week period at the end of March. Mr. Vukovich submitted precise instructions for the buy orders so they would coincide with his selling. He then paid $36,875 in kickbacks, the complaint stated. A second set of buying took place in August, 2008, when Individual A arranged for the purchase of 90,000 Pantera shares for $25,200. The SEC did not claim that Mr. Vukovich paid any bribe in the second set of buying.

The complaint sought disgorgement of ill-gotten gains, appropriate civil penalties and penny stock bans. In filing the suit, the SEC acknowledged the assistance of the FBI and the U.S. Attorney's Office for the Southern District of New York.

Mr. Vukovich, in an answer filed on May 6, 2011, denied any wrongdoing. While he provided few details, he identified Individual A as a man who used the name Charlie Moore. (Charlie Moore was the name used by an undercover FBI agent in an unrelated broker bribery case also from 2008, that against Vancouver promoter John Zanic. Prosecutors in New York claimed that Mr. Zanic bribed the agent to have brokers buy shares of pink sheets listing Guyana Gold Corp. Mr. Zanic pleaded guilty and is serving one year in jail. Unlike Mr. Zanic, Mr. Vukovich only faces civil charges.)

Pantera, which traded between 30 and 50 cents during the scheme, has since rolled back 1:20 and changed its name to ESP Resources Inc. It last traded for 11 cents. Pantera was also a defendant in the case until it settled on Dec. 16, 2011. Without admitting any wrongdoing, it agreed to an order barring future violations.

VPD investigation of Vukovich

The SEC case was not the first time that Mr. Vukovich was linked to a broker bribery scheme. In 2008, the Vancouver Police Department filed an information sheet in which it sought records from Global Securities Corp. relating to trading by Mr. Vukovich. The VPD said that he and others paid secret commissions to an undercover FBI agent in New York. The agent had told them that he could arrange for brokers to buy shares of OTC-BB listing Novori Inc. The Vancouver Sun's David Baines first reported the VPD investigation on Oct. 22, 2008. It has not resulted in any charges.

Mr. Vukovich also faced an administrative action from the former Vancouver Stock Exchange in 1996 after he briefly worked as a broker. The VSE said that he wrote sales letters to clients in which he falsely claimed that he had generated a 250-per-cent return for past customers. He also claimed that he had an MBA and that he was a senior investment adviser. He later admitted that he did not have an MBA and that he had only obtained his brokerage licence three months before he sent the letters. The VSE fined him $5,000 (Canadian) and banned him for 10 years.

http://www.stockwatch.com/News/Item.aspx?bid=Z-C:*SEC-1914734&symbol=*SEC&news_region=C